Tag: mutual funds

Growth vs value mutual funds: Where should you invest and why?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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When it comes to mutual funds, investors often encounter a fundamental choice between two philosophies: growth and value investing.

In ‘growth’ investing, the focus lies on companies with the potential for faster-than-average growth. On the other hand, ‘value’ funds hunt for undervalued stocks poised for appreciation.

Growth funds are tailored to invest in companies positioned for substantial expansion and profit.

Investors are offered the opportunity to maximise capital appreciation as fund managers strategically target growth opportunities, often willing to pay a premium for such prospects.

In contrast, value funds scour the market for stocks deemed attractively priced relative to their underlying fundamentals.

These funds operate on the premise that certain companies may be undervalued by the market, with their stock prices not accurately reflecting their true worth.

By investing in inherently valuable companies with significant growth potential, value funds focus on intrinsic value, considering factors such as financial health, business models, competitive positions, and management teams.

So, the burning question remains: which approach is better?

According to Hemant Rustagi, CEO of Wiseinvest, a blended approach is the way forward.

“Investors should consider both value and growth philosophies, weighing the optimal exposure to each strategy. While value funds offer stability and potential long-term growth, a preference towards growth funds may align better with those seeking higher returns,” he told CNBC-TV18.

Flexibility is key, enabling investors to adjust their allocation between these philosophies as market dynamics shift.

By striking a balance and remaining attuned to changing market scenarios, investors can navigate the investment landscape with prudence.

Also Read | Over 1 crore mutual fund accounts ‘on hold’ due to incomplete KYC: What should investors do

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Axis MF launches Nifty Bank Index Fund: Should you invest?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Axis Mutual Fund on Friday (May 3) launched Nifty Bank Index Fund. This open-ended index fund aims to track the Nifty Bank TRI. The new fund offer (NFO) of the scheme will be available till May 17, 2024.

Managed by fund managers Karthik Kumar and Ashish Naik, the fund aims to replicate the total returns of the Nifty Bank TRI, subject to tracking errors.

It will invest primarily in stocks comprising the underlying index, following a passive investment strategy.

Additionally, the fund may allocate a portion of its assets to debt and money market instruments to meet liquidity and expense requirements.

The minimum investment amount allowed will be ₹500 and in multiples of ₹1 thereafter.

The exit load applicable will be 0.25% if redeemed/ switched out within seven days from the date of allotment/ investment and no exit load if redeemed/ switched out after seven days from the date of allotment/ investment.

Investment strategy

The Axis Nifty Bank Index Fund adopts a passive investment strategy.

The index undergoes semi-annual rebalancing to ensure it accurately reflects the sector’s dynamics, incorporating companies that best represent its performance.

Rationale for investment

The launch of the Axis Nifty Bank Index Fund comes at a time when India’s banking sector continues to exhibit growth and resilience.

B Gopkumar, MD & CEO of Axis AMC, highlighted the sector’s promising trajectory, driven by robust regulatory frameworks and the rapid adoption of digital banking.

Investment considerations

According to Ashish Gupta, Chief Investment Officer at Axis AMC, the fund offers investors an attractive opportunity to gain exposure to India’s banking sector, which is poised to play a pivotal role in the country’s economic expansion.

“With increasing financial inclusion and a shift towards sophisticated banking services, the sector holds potential for significant returns,” Gupta said.

By investing in a diversified mix of large-cap and mid-cap banking companies, including both PSUs and private banks, the fund offers a cost-effective and efficient means to capitalise on the sector’s growth prospects.

However, prudent decision-making should always be based on individual financial goals, coupled with professional consultation when necessary.

ALSO READ | Groww MF launches India’s first non-cyclical index fund: Should you invest?

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Over 1 crore mutual fund accounts ‘on hold’ due to incomplete KYC: What should investors do

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Approximately 1.3 crore mutual fund accounts are currently ‘on hold’ due to incomplete KYC (know your customer) compliance, according to media reports.

Notably, these accounts had their KYC processes completed using documents such as electricity bills, telephone bills, and bank account statements.

However, under the Securities Exchange Board of India’s (SEBI\) latest directive, these documents are now considered invalid for KYC purposes.

Officially valid documents include an Aadhaar card, passport, and voter ID card.

Consequently, investors with accounts flagged as ‘on hold’ are currently restricted from engaging in any transactions within mutual funds, whether buying or selling units.

Understanding the KYC status

KYC status serves as a crucial indicator of an individual’s compliance with regulatory requirements.

It is only when the submitted documents are duly accepted by the processing authority that an individual achieves KYC compliance.

Any subsequent modifications to personal records necessitate a KYC change request.

Accounts on ‘hold’

Swarup Mohanty, VC and CEO at Mirae Asset Investment Managers India, shed light on the urgency of addressing accounts on hold.

“Out of our almost 70 lakh folios, we have 76,500 folios, which are on hold.” Mohanty told CNBC-TV18.

He emphasised the importance of adhering to regulatory mandates and acknowledged the challenges posed by data assimilation and server capacity amid compliance activities.

Regarding the potential impact on systematic investment plan (SIP) numbers for April, Mohanty said it’s better to wait for industry data to assess the actual repercussions on investments.

Resolving the ‘on-hold’ status

The first step towards resolving the ‘on-hold’ status is to check one’s KYC status through designated KYC registration agencies (KRAs) such as KARVY, CVL, NDML, CAMS, and DOTEX.

For instance, if using the CVL KRA:

Step 1: Visit the CVLKRA website.

Step 2: Click on ‘KYC Inquiry’ at the top of the screen.

Step 3: Enter your PAN and click ‘Submit.’

Once the KYC status is determined, if one finds themselves in the ‘on hold’ category, they can initiate the resolution process.

This involves submitting an online request via the KRA or mutual fund portal to update details, thereby removing the hold status and allowing resumption of investment activities.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Aditya Birla Sun Life Mutual Fund launches Nifty PSE ETF: Should you invest?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Aditya Birla Sun Life Mutual Fund on Thursday (May 2) launched Nifty PSE Exchange Traded Fund (ETF). This is an open-ended ETF tracking the Nifty Public Sector Enterprise (PSE) Index.

The New Fund Offer (NFO) will remain open till May 16, 2024.

The ETF offers investors an opportunity to invest in India’s Public Sector Enterprises (PSEs) that will be responsible for propelling the growth of India going forward.

The investment proposition

The ETF is positioned to leverage several factors that could potentially fuel its growth trajectory.

These include a favorable demand environment, strong financial backing, strategic market positioning, and attractive valuations.

Aditya Birla Sun Life Mutual Fund emphasised that these elements could make investing in PSEs a decade-long opportunity.

Benefits and considerations

According to the mutual fund house, the ETF offers a blend of benefits.

Investors can gain exposure to leading public sector companies boasting robust market positions, potentially reaping rewards from both high dividend yields and long-term growth prospects.

Moreover, the government’s support typically translates into lower volatility compared to individual stocks, adding a layer of stability to the investment.

One notable aspect of this ETF is its alignment with key national priorities like Make in India and Atmanirbhar Bharat.

Who should consider investing?

According to Aditya Birla Sun Life Mutual Fund, long-term investors seeking growth opportunities, income-focused individuals eyeing dividends, and those aiming for portfolio diversification through exposure to the PSE sector might find value in this ETF.

A Balasubramanian, Managing Director & CEO of Aditya Birla Sun Life AMC, highlighted the role of PSEs in India’s economy and the ETF’s potential to harness their collective strength and stability.

“By tracking the Nifty PSE Index and minimising tracking errors, investors can gain exposure to vital companies poised to drive India towards becoming a $7 trillion economy by 2047,” he said.

However, investors should conduct thorough research, assess their risk tolerance, and consult with financial advisors before making investment decisions.

ALSO READ | Groww MF launches India’s first non-cyclical index fund: Should you invest?

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Groww MF launches India’s first non-cyclical index fund: Should you invest?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Groww Mutual Fund (MF) on Thursday (May 2) launched the Nifty Non-Cyclical Consumer Index Fund. This marks the inception of India’s first non-cyclical index fund. The scheme is aimed at securing long-term capital appreciation through strategic investments in equity and equity-related instruments.

The new fund offer (NFO) of the scheme will be available for subscription till May 16.

Fund details

Managed by Abhishek Jain, a professional with nearly 12 years of experience in equity markets, the Groww Nifty Non-Cyclical Consumer Index Fund seeks to emulate the performance of the Nifty Non-Cyclical Consumer Index.

The core strategy involves maintaining identical weightage to the index constituents, with the objective of mirroring its total return.

The benchmark of the scheme is set as the Nifty Non-Cyclical Consumer Index – TRI.

Minimum investment

The fund offers a minimum lump sum investment of ₹500, with subsequent increments in multiples of ₹1.

For investors opting for Systematic Investment Plans (SIP), the minimum investment stands at ₹1,200.

Load details

The fund imposes an exit load of 1% if units are redeemed or switched out within 30 days from the date of allotment, according to the mutual fund house.

However, no exit load is applicable beyond this initial 30-day period.

Certain exemptions apply to units allotted on reinvestment of Income Distribution cum Capital Withdrawal, while systematic transactions adhere to prevailing exit loads.

Investment strategy

The fund’s underlying investment strategy entails allocating between 95% to 100% of its assets to equities and equity-related securities, with a minor allocation of 0% to 5% in debt and money market instruments, units of debt schemes, and debt ETFs.

Sector breakup of the index tracked by the scheme

(Source: Groww)

Investor considerations

According to Groww Mutual Fund, investors with long-term horizons and a preference for equity and equity-associated securities should invest in Groww Nifty Non-Cyclical Consumer Index Fund.

However, prudent decision-making should always be based on individual financial goals, coupled with professional consultation when necessary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

SEBI Board meeting: Key amendments for REITs and InvIT investments, VC, MFs and MIIs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Market Regulator SEBI, in its board meeting, approved a series of amendments around REITs and InvITs investments, venture capital (VC) funds, mutual funds, and market infrastructure institutions (MIIs). The decision was taken in SEBI’s 205th board meeting. This is the second board meeting after March 15.

Here’s a list of all important announcements from the SEBI board meeting today:

SEBI on REITs & InvIT investments

SEBI, in its board meeting, approved the proposal to provide a framework for Unit Based Employee Benefit (UBEB) schemes for the employees of investment manager/manager of InvIT/REIT. The investment manager can now receive units of InvIT/REIT in lieu of management fees, for the purpose of providing unit-based employee benefits. Such units shall be allotted directly to the Employee Benefit Trust so that these units are used exclusively for the UBEB scheme.

Flexibility to venture capital funds

SEBI has allowed some relaxations for Venture Capital Funds wanting to migrate to the new SEBI (Alternative Investment Funds) Regulations, 2012 (‘AIF Regulations’) and have not been able to fully liquidate their positions before doing so. Such VC funds will have the option to migrate into AIF Regulations and avail the facilities available for such AIFs to deal with unliquidated investments.

Level-playing field for passive mutual fund equity schemes

To create a level playing field for all mutual fund equity schemes, SEBI has approved amendments to allow equity passive schemes, on indices to be specified by SEBI, to take exposure up to the weightage of the constituents in the underlying index. This exposure would be subject to an overall cap of 35% investment in the group companies of the sponsor.

Currently, mutual fund schemes are not allowed to invest more than 25% of their net asset value (NAV) in group companies of the sponsor. This restricts the passive funds from effectively replicating the underlying index, in cases where group companies of sponsor comprise more than 25% of the index. This also puts such AMCs at a relative disadvantage as compared to other AMCs who may not have a sponsor group of companies comprising more than 25% in the underlying index.

Institutional mechanism for deterrence of potential market abuse including front-running at AMCs

Considering the recent front-running instances observed by SEBI, the market regulator approved amendments to mutual funds regulations for enhancing the existing regulatory framework by requiring Asset Management Companies (AMCs) to put in place a structured institutional mechanism for identification and deterrence of potential market abuse including front-running and fraudulent transactions in securities. The mechanism shall consist of enhanced surveillance systems, internal control procedures and escalation processes to identify, monitor and address specific types of misconduct including front running, insider trading, and misuse of sensitive information. In this regard, SEBI has also approved amendments to the Regulations to a) enhance responsibility and accountability of management of AMCs for such an institutional mechanism; and b) foster transparency by requiring AMCs to have a whistle-blower mechanism.

SEBI also approved an exemption to the requirement of recording face-to-face communication, including out-of-office interactions, during market hours. This exemption would be applicable after implementation of the institutional mechanism by the AMCs

Ease of doing business for market infrastructure institutions (MIIs)

SEBI, in its board meeting, also approved a slew of measures to ease out compliance requirements for MIIs like exchanges, depositories and clearing corporations.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Contributions from areas beyond top 30 metro regions drive mutual fund investment growth

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a notable development within the mutual fund (MF) industry, assets under management (AUM) have surpassed the significant milestone of ₹50 lakh crore. Notably, there has been a substantial contribution from B-30 cities—areas beyond India’s top 30 metro regions—highlighting a noteworthy shift in investment dynamics.

The geographical categorisation established by the Securities and Exchange Board of India (SEBI), commonly referred to as B-30, categorises cities based on various criteria such as financial infrastructure and overall development.

This classification provides insights into the distribution of mutual fund assets, offering visibility into emerging investment patterns.

Rushabh Desai, Founder of Rupee with Rushabh Investment Services, and Abhishek Tiwari, Executive Director and Chief Business Officer at PGIM India MF, provided insights into this significant trend.

Desai noted, “Between March 2023 and March 2024, we observed 35% growth in absolute terms. While B-30 cities have contributed significantly, they still represent approximately 18% of the total, with the top 30 cities accounting for a substantial 82% share. This indicates a contribution of approximately ₹45 lakh crore from the top 30 cities, with around ₹10 lakh crore originating from areas beyond these major urban centers.”

He further highlighted the increasing penetration of equity investments from B-30 cities in recent years, signaling a growing interest in financial markets within these regions.

Tiwari commented on the trajectory observed in B-30 cities, emphasising the prevalence of equity investments in their investment portfolios.

“The journey in B-30 cities has primarily been focused on equity investments. However, amidst this growth, it’s essential for the MF industry and stakeholders to prioritise education. While ‘mutual funds sahi hai’ has become a popular phrase, understanding the rationale behind investment decisions is crucial,” Tiwari explained.

As the investment landscape undergoes continual evolution, the comparison between smaller cities and their metropolitan counterparts presents an engaging narrative.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

TRUST MF’s Flexi Cap Fund collects over ₹510 crore during NFO period

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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TRUST Mutual Fund’s maiden equity offering, TRUSTMF Flexi Cap Fund (an open-ended dynamic equity scheme investing across large cap, mid cap, small cap stocks), has garnered over ₹510 crore in assets under management (AUM) at the close of its NFO period as on April 20, 2024.

On this, Mihir Vora, Chief Investment Officer, TRUST Mutual Fund said “The strong NFO collection and large number of applications reflect investor confidence in our investment ideology and expertise. We are looking to spread the deployment of funds across next few weeks in a judicious and optimal manner.”

The fund is being managed by Mihir Vora – Chief Investment Officer who has over 30 years of experience in fund management across verticals in the financial service industry along with Aakash Manghani, Fund Manager-Equities who has 14 years of robust experience in the investment space.

TRUSTMF Flexi Cap Fund is managing investments in a diversified portfolio of equity and equity-related securities across the entire market capitalisation spectrum, along with debt and money market instruments.

Investors can opt for either the Regular Plan or the Direct Plan, with options including Growth Option and Income Distribution cum Capital Withdrawal (IDCW) Option.

The scheme imposes no entry load, while an exit load of 1% is applicable if redeemed or switched out within 180 days from the date of allotment, thereafter transitioning to nil.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why goal and timeframe are important in mutual fund investments

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The significance of having a clear goal and a defined time frame cannot be overstated when it comes to mutual fund investments. While conventional wisdom suggests that a longer timeframe allows investors to ride out market fluctuations, a judiciously chosen shorter timeframe can also yield substantial returns.

Niranjan Avasthi, Senior Vice President and Head of Product, Marketing, and Digital at Edelweiss MF, stressed on the necessity of aligning one’s investment horizon with the chosen asset class.

“Whether it’s fixed deposits, gold, real estate, or equities, the investment horizon must match the return potential and risk of the asset class,” Avasthi told CNBC-TV18.

Avasthi further explained that within the realm of mutual funds, the investment horizon plays a pivotal role.

“Equity investments require a long-term perspective, while debt investments can be approached with a shorter timeframe,” he added.

Similarly, Kshitiz Mahajan, Co-Founder of Complete Circle Consultants, echoed these sentiments by underlining the significance of setting investment goals.

Mahajan emphasised that without a clear destination in mind, investors might overlook the benefits of compounding.

“Aligning your investment with a specific goal ensures that you leverage the power of compounding, which is indispensable for long-term success,” Mahajan said.

In essence, the consensus among industry experts is clear: having a goal and a time frame tailored to the chosen asset class is crucial for maximising returns and achieving financial objectives in the world of mutual funds.

For more, watch the accompanying video

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Groww MF increases minimum investment requirements for Nifty Total Market Index Fund: What this means for investors

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Groww Mutual Fund has announced changes to investment criteria for its Nifty Total Market Index Fund. The alterations focus on the minimum application and Systematic Investment Plan (SIP) amounts.

The minimum application amount for the Groww Nifty Total Market Index Fund has been revised from ₹10 per application to ₹100 per application.

Additionally, investors opting for SIPs will face revamped minimum investment requirements across different frequencies.

For weekly and monthly SIPs, the minimum amount has been elevated from ₹10 to ₹100. For investors selecting the quarterly SIP frequency, the minimum amount has been raised from ₹10 to ₹300.

The raised minimum investment thresholds represent a higher entry barrier for new investors.

With fewer smaller investors and larger sums being invested, the fund may experience improved liquidity and stability.

Existing investors in the Groww Nifty Total Market Index Fund may need to reassess their investment strategies in light of the increased minimum amounts.

They may consider factors such as affordability, investment goals, and the impact on their overall portfolio allocation.

In a separate development, financial services company Groww said it has received the Securities and Exchange Board of India’s (SEBI’s) approval to launch the Nifty Non-Cyclical Consumer Index Fund through a new fund offering (NFO).

This will be India’s first non-cyclical index fund and will be launched by Groww Mutual Fund.

The NFO is expected to go live in the first week of May.

It will be an open‐ended scheme tracking the Nifty Non-Cyclical Consumer Index–TRI.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow